AYYASWAMI NADAR Vs. S.V.G. RATHNASAMI NADAR

JUDGEMENT

(1.) This revision petition raises a question of procedure in respect of delivery of possession of property sold by an Official Receiver in insolvency, which is situate outside the territorial jurisdiction of the Court which adjudicated. One Ratnasami Nadar was adjudged as an insolvent in I. P. No. 1 of 1960 by the Court of the District Munsif, Tuticorin. As a result, the insolvent's properties vested in the Official Receiver, Tirunelveli. The property in question, which the Official Receiver sold to the petitioner, who happened to be the highest bidder at an auction on 30th August 1961 is situate within the limits of the Koilpatti Munsif. The Official Receiver executed a conveyance in his favour on 21st September, 1961. The petitioner thereafter applied to the Court of the District Munsif of Tuticorin for delivery of possession of the property, or, if necessary for transmission of the delivery order to the Court of the District Munsif, Koilpatti, for giving effect to it. This application was opposed on the ground that as the District Munsif of Tuticorin had no territorial jurisdiction over the property, he could not make an order for delivery. This objection was upheld and the learned District Judge concurred with that view. This petition is to revise this order. In my opinion, the Courts below were in error as to the scope of the jurisdiction of the Insolvency Court. Insolvency is a special jurisdiction, the nature and limits of which are governed by the statutory provisions which confer it on Courts. S. 3 (1) of the Provincial Insolvency Act, 1920, enacts that the District Courts shall be the Courts having jurisdiction under the Act. The proviso to this Sec. confers power on the State Government to invest, by notification, any Courts subordinate to the District Court with jurisdiction in any class of cases, and any Court so invested shall within the local limits of its jurisdiction have concurrent jurisdiction with the District Court under the Act. The Insolvency Court, as provided by S. 5, has general powers of Courts. It shall have the same powers and shall follow the same procedure as the Courts otherwise have and follow in the exercise of original jurisdiction in regard to civil suits. On adjudication, the whole of the property of the insolvent will vest in the adjudicating Court or in a Receiver. That is under Sec. 28 (2), and for the purpose of vesting, it may not matter where the property of the insolvent is situate. Sec. 56empowers the Court to appoint a Receiver for the property of the insolvent and on such appointment his property will vest in him. Sub -S. (3) of this Sec. provides that where such appointment is made, the Court that makes it may remove the person in whose possession or custody any property of the insolvent is from the possession or custody thereof. Construing the ambit of this section, in the light of Ss. 4and 5, this Court in Vandarguzhal Achi v/s. South Indian Corporation (Madras) Ltd., : (1944) 2 M. L. J. 52 (F.B.), held that, widely worded as these Ss. are they empower the Court to give possession to the purchaser of property sold at the instance of the Official Receiver. S. 59gives power to the Official Receiver to sell all or any part of the property of the insolvent. Sec. 77, which is important here, reads:

(2.) Under this section, as I read it, a request in respect of a matter from an Insolvency Court to another Insolvency Court, will invest the latter with jurisdiction to the extent and for the purpose of giving effect to such request, provided both the Courts have similar jurisdiction in regard to similar matters within their respective jurisdiction. That I think is the effect of this section. Conceivably, its object is that, having regard to the nature of jurisdiction, namely, administration of an insolvent's properties, wherever situate, Courts of similar jurisdiction should be enabled to act in aid of each other in the interests of and to facilitate such administration. When the Act provides for vesting in Court or the Official Receiver, on adjudication of a person as an insolvent, of his properties, wherever they may be situate, within or without the territorial limits of the Court adjudicating, and the Court or the Official Receiver may sell such properties, and for the purpose of vesting the Court has effective power to put the Official Receiver in possession, it is necessary that the special jurisdiction is made effective and complete by this enabling provision to seek by request and for the purpose of the aid of other Courts of similar jurisdiction. I am therefore unable to accept the view of the Courts below that there was no option but to dismiss the application for delivery, because the Tuticorin Munsif has no territorial jurisdiction over the property.

(3.) This view of the provisions of the Act has support of authority. L. King and Co., Bankrupts, In re, 33 Cal. 542, related to an application to the High Court of Calcutta, on its insolvency jurisdiction, to examine a certain witness in connection with an adjudication by an English Court. The jurisdiction of the Calcutta High Court was questioned. Sec. 126 of the Presidency Towns Insolvency Act, 1909, provides that all Courts having jurisdiction under that Act, should make such orders and do such things as may be necessary to give effect to Sec. 118 of the Bankruptcy Act, 1883. That Sec. in the Bankruptcy Act was to the effect that every British Court elsewhere having jurisdiction in bankruptcy or insolvency, and the Officers of those Courts respectively, should severally act in aid of, and be auxiliary to, each other in all matters of bankruptcy, and an order of the Court seeking aid, with a request to another of the said Courts, should be deemed sufficient to enable the latter Court to exercise in regard to the matters directed by the order, such jurisdiction as either the Court which made the request, or the Court to which the request is made, could exercise in regard to similar matters within their respective jurisdiction. The Calcutta High Court held that in view of these provisions, it would have jurisdiction to examine the witnesses, provided a letter of request was forwarded to that Court by the British Court. In Jewandas Jhawar, In re, 40 Cal.78 =, 57 L. W. 451, a similar question arose in respect of certain sale proceeds brought into the District Court, Delhi, which belonged to the Official Assignee in whom the property of the insolvent had been vested. The adjudicating Court, acting under S. 126of the Presidency -Towns Insolvency Act, 1909, requested the District Judge of Delhi to act in aid under S. 50of the Provincial Insolvency Act. The Court held: